-2003 Kelowna fire wake-up call for insurance industry-

OSOYOOS TIMES-December 19, 2007-

By Chad IngramrnOsoyoos Times

Get your home evaluated as soon as possible.
That's the advice of one Osoyoos insurance agent, who says the skyrocketing price of building in B.C. means that home-replacement values are way up.
Doug Eisenhut says those who haven't re-insured their homes in the last three years are likely to be 25-30 per cent under-insured.
Everyone thinks about the market value, but we're just talking about the cost of replacing the house, Eisenhut says.
He explains that while one might buy a 25-year-old house for $350,000, the cost of replacing that house, should anything happen, might be closer to $450,000.
Eisenhut attributes the high cost of building to a number of factors, including the current housing boom, the upcoming Vancouver Olympics and a scarcity of labour.
It's supply and demand, Eisenhut says. The demand is strong, but the supply of materials and labour is weak.
Eisenhut says it is extremely important that people be accurately insured.
If you have a partial loss, say your kitchen burns down, and you are 50 per cent under-insured, the company will only cover half of the replacement cost. Say it was a $10,000 kitchen, you would have to pay $5,000.
This is what's referred to as a co-insurance penalty clause, Eisenhut says. There are clauses that guarantee replacement costs, so long as the home-owner keeps an up-to-date assessment of the home and informs the insurance agent regularly.
People should probably go every year or two to get it up to the proper grade, Eisenhut says.
While an official appraisal may be the most accurate way to determine the worth of your home, appraisals are expensive ventures. There are, however, alternative methods of determining a home's value.
We have evaluators in the office, Eisenhut says. There is no cost.
He says the process takes about 15 minutes and determines the minimum amount of insurance a home should have.
In our office, we do yearly evaluations for our clients, says Myers Bennett of Johnston Meier Insurance.
He agrees that high replacement costs are linked to high building costs, caused largely by a shortage of labour and materials. He also sees a local reason for insurance agents being more aware of replacement values, that being the 2003 Kelowna fire.
That was a major wake-up for insurance companies, Bennett says, adding that many of the homeowners who suffered losses in the blaze were severely under-insured.
Sal Chiccia, also of Johnston Meier, says he advises clients to insure for a minimum of $200 per square foot.
The insurance agents all seemed to agree that the current trend of high building costs in B.C. is bound to continue.